Second, when you talk to those multi-unit operators you'll be told straight away they won't need all the hand holding, training, and guidance that those attention stealing needy newbie first-timer franchisees demand. Those experienced operators will manage themselves! You will likely be told that you could learn a thing or two from these highly experienced operators.

Again, the reality is different.

The reality is that many development agreements are not strictly complied with, according to the terms the agreement.

Searching the SEC corporate filings from publicly traded franchise companies you can find that many area development agreements are in default, technical default, terminated, or re-negotiated.

You may need to review the historical Franchise Disclosure Documents, FDDs, which may be harder to access.

The third myth is that experienced multi-unit operators are easier to manage. There are four reasons why this may not be true, either.

1. Multi-unit operators are further away from the day-to-day operations. They may require or even demand more training and support from the franchisor.

3. They may have different ideas on site selection criteria and who has final say on site approval -despite what the agreement states.

4. A seasoned multi-unit operator may change your concept, menu, build-out, equipment package and they may not ask your permission. Again, despite what the agreement states.

So, recruiting mult-unit operators from other brands does require a bit more due diligence. Here are four tips to get you on your way.

1. Access toCapital: Do they have access to capital to build out the development schedule for your new concept?

Many multi-unit operators look more profitable than they are. Their development schedule may have been drafted in a moment of enthusiasm. Their capital maybe entirely locked-up in their current brands.

Don't automatically assume that a 40 unit operator has sufficient capital or access to capital to commit to your project.

Don't fall into the trap of getting excited about signing up a large multi-unit operator for your brand, unless they show you the money.

2. Other Development Obligations: What are their development obligations, including remodel commitments, to their other concepts?

Just knowing that they have the money isn't enough. You need to know about their development obligations to their current brands. You have to pay to attention to their remodel commitments. Much of their capital may already be spoken for.

Can they build the stores and remodel the units that they are already committed to without exhausting their capital? Is the multi-unit operator meeting its current lender obligations and staying within their loan covenants?

3. Compliance with Schedule: Are they in compliance with the schedule in their current development agreement(s)?

The mulit-unit operator may have sufficient capital to expand your franchise system. But, are they dragging their feet in their current development agreement?

Development schedules can be slowed if operating revenue has been reduced. Beware of the multi-unit operator who uses a slow development tactic to extract territorial concessions from you mid-deal.

4. Compliance with Operations: Are they in operational compliance under their current franchise agreements?

Not all multi-unit operators are actually great operators - despite what they would claim! Don't be fooled by a multi-unit operator who is merely tolerated in the system because they own great locations or control the underlying real estate.

Check to make sure that they are exceeding the franchisor's standards.

Conclusion

Franchisors need to grow. And you should recruit from established existing franchisees of other brands. But they need to possess the operational expertise, development know-how and be well-funded.

Always stay focused on building a durable and sustainable franchise system.